Synchronisation of the situation on the stock market with the indicators of market sentiment using the example of selected stock exchanges

Unpredictability and instability are inherent in financial markets. Investors assess situations differently and often interpret information differently, making it difficult for them to achieve stable results. Therefore, synchronising stock market trends with market sentiment indicators is an important area of research in risk management and financial uncertainty. The stock market indices analysed in the article, WIG (Poland) and S&P500 (USA), were compared with their respective market sentiment indicators, INI and AAII. Using spectral analysis, the study sought to answer the question of whether and how stock market trends are synchronised with market sentiment in-dicators. In practical terms, the study tested the possibility of predicting stock market trends based on the cycles of investor sentiment indicators. The analysis covers the years 2011-2024, a period marked by heightened uncertainty, including the COVID-19 pandemic and fluctuations in inflation rates. It turns out that there is indeed a correlation between market sentiment indicators and stock index changes, but it is a two-way relationship: investors try to predict market movements, but are also influenced by them. In Poland, however, sentiment indicators seem to lead stock market trends. By understanding this dynamic, investors can improve their risk management by adjusting their portfolios to market conditions, thereby managing their financial risk more effectively.